ANOTHER plan has been approved to get the ill-fated steel mill out of government hands. This time, the Privatisation Commission board has agreed to a proposal to lease out the mill for a period of 30 years to any interested party. If successful, and that is a big if, the proposal might yet see the realisation of a dream that is more than a decade old already: the handing over of the steel mill to an operator more suitable to manage it efficiently than the government of Pakistan. This would be a step forward. Ever since the Supreme Court killed the privatisation of the mill in its famously controversial judgement of 2005, the mill has been struggling. Today, it has accumulated losses close to Rs166 billion, as well as untold billions invested in the myriad ‘rescue packages’ that have been necessary over the years to meet its running expenses and ‘replacement imports’. Meanwhile, its output has floundered and one plan after another for its revival has been dead on arrival. The latest one, which involved handing it over to the Sindh government, seems to have died a natural death after the provincial government’s conspicuous lack of enthusiasm.

The real cost of that controversial judgment in 2005 will be tallied up by future historians. For now, it’s enough to say that it runs into billions of dollars. For a government that has twice approached the IMF for a bailout due to dwindling foreign exchange reserves since 2005, this is clearly an unacceptable cost. Multiple governments have made the effort to try and revive the mill through their own efforts, but have failed. By now, it ought to be abundantly clear to everyone that there are very few options left. Holding on to the mill is prohibitively expensive for a cash-strapped government, and seeking its revival as a public entity is something everyone has failed at. So if privatisation has become too controversial due to the politics of our time, perhaps the proposal just floated by the commission is worthy of consideration. The conditions attached to the proposal are stringent. The interested party would not be allowed to sell the mill, its assets or its land. They will have to invest their own money for plant upgradation. The accumulated losses will have to be cleared by the government. But if the investor can turn the entity around, then the proposal deserves to be given serious thought.

Published in Dawn, January 19th, 2017